Recently, a trend has emerged that should have hospitals cautious about the way they handle their MVA related claims when there is third-party liability involved. Whether the hospital processes these complex claims internally or outsources them to a vendor, it is important to be aware of the risk that mismanagement of these types of claims can bring. This risk can come in the form of monetary loss due to lawsuits, and at the risk of the hospital’s reputation regarding treatment of their patients. Either way, it isn’t a risk worth taking.
As recent as May of this year, a class action lawsuit was brought by thousands of plaintiffs against a hospital based in Illinois, who are suing because the health system allegedly filed liens incorrectly against patients instead of properly billing their commercial insurance. As alleged in their complaint, the health system in question had a policy that stated treatment for patients who were in an accident that included a third-party liability would not get billed to commercial, but instead they would place a lien on any settlement proceeds from the third party in order to maximize their recovery. In short, the hospital was placing a lien on the recovery for the full amount of their chargemaster rates, instead of billing commercial insurance for the agreed upon discounted rate(s). In circumstances when the patient’s commercial insurance is not billed in favor of placing a lien, the hospital runs the risk of the third-party liability claim not settling, and potentially missing the commercial timely filing deadline without receiving any payment. Plaintiffs brought numerous class action lawsuits against a number of health systems for ignoring to bill their health insurance when it could cover a substantial portion of their stay.
What is the most important key to successful recovery? At EnableComp, we know it depends on how fast you can identify the appropriate payer and file your claim. In addition, if it becomes necessary, filing a lien to secure your right to payment upon settlement of a third-party liability claim is a suitable course of action.
Do you know the relevant hospital lien statute for the state you do business? If not, mishandling these claims could be costly for hospitals. Ensure your process includes a legal staff that maintains compliance with state statutes to ensure your MVA claims are being handled properly and efficiently.
No matter how you choose to handle these claims, be prepared for a potentially long and difficult road to reimbursement. Having a trusted partner that fully understands the constantly evolving, state-specific filing process is important to ensure timely and compliant payment while also maintaining patient satisfaction.